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Distribution and Location. 7. chapter. Prepared by Ron Knowles Algonquin College. Business Plan Building Block. Chapter 7 will help you select a distribution strategy and location that is best for: The customer Your type of business The options that are available. 7. chapter. - PowerPoint PPT Presentation
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Chapter 7 7-1Copyright © 2007 by Nelson, a division of Thomson Canada Limited.
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ter
chap
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Distribution and LocationDistribution and Location
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Prepared byPrepared byRon KnowlesRon Knowles
Algonquin CollegeAlgonquin College
Chapter 7 7-2Copyright © 2007 by Nelson, a division of Thomson Canada Limited.
Business Plan Building BlockBusiness Plan Building Block
Chapter 7 will help you select a distribution strategy and location that is best for:
The customer
Your type of business
The options that are available
chap
ter
chap
ter
77
Chapter 7 7-3Copyright © 2007 by Nelson, a division of Thomson Canada Limited.
Learning OpportunitiesLearning Opportunities
Understand the contribution of location to small business success.
Understand the uniqueness of business-location needs. Focus on customer needs when evaluating a location. Develop a checklist for evaluating potential sites for a
business. Think about if and when you should locate your business
out of the home. Use both secondary and primary sources of information in
locating your business. Understand and negotiate a lease contract.
Chapter 7 7-4Copyright © 2007 by Nelson, a division of Thomson Canada Limited.
Distribution StrategyDistribution Strategy
• Your distribution strategy will depend on a number of factors, such as:Customer needsType of business (B2C or B2B)Type of product/serviceTransportation costsCompetition
• Successful entrepreneurs take advantage of more than one distribution channel.
Chapter 7 7-5Copyright © 2007 by Nelson, a division of Thomson Canada Limited.
Distribution StrategyDistribution Strategy
• Successful entrepreneurs take advantage of more than one distribution channel.
• Your physical location should depend on a multiple distribution strategy.
Chapter 7 7-6Copyright © 2007 by Nelson, a division of Thomson Canada Limited.
The “Best” LocationThe “Best” Location
___Local/municipal licensing___Neighbourhood mix___Competition___Security, safety___Labour pool___Services___Costs___Ownership___Property owner/landlord___Past tenants___Space___Accessibility___Professional advice
___Local/municipal licensing___Neighbourhood mix___Competition___Security, safety___Labour pool___Services___Costs___Ownership___Property owner/landlord___Past tenants___Space___Accessibility___Professional advice
___Parking___History of the property___Physical visibility___Life-cycle stage of the area ___Image___Hours of operation___Utilities___Local zoning by-laws___Taxes___Approvals___Transportation___ Your target customers
___Parking___History of the property___Physical visibility___Life-cycle stage of the area ___Image___Hours of operation___Utilities___Local zoning by-laws___Taxes___Approvals___Transportation___ Your target customers
•A location filter or checklist will help you zero in on the “perfect” location•Use a scale of 1 to 10 to rate the relative importance of each item on this list. When you finish scoring, go back and note the high numbers anything above 5.
Chapter 7 7-7Copyright © 2007 by Nelson, a division of Thomson Canada Limited.
The Rise of the Gold-Collar Worker
Working at home has become a major trend and is one of the golden industries of the 21st century.
10 Major reasons for the home-based trend
Increased EfficiencyIncreased Efficiency
Growth of Service Industry
Growth of Service Industry
ComputerizationComputerization
Higher ProductivityHigher Productivity
Two-Income FamiliesTwo-Income Families
CocooningCocooning
Vigilant ConsumerVigilant ConsumerImproved ServiceImproved Service
MobilityMobilityDownsizingDownsizing
Chapter 7 7-8Copyright © 2007 by Nelson, a division of Thomson Canada Limited.
Is Home the “Best” Place?Is Home the “Best” Place?
Potential Disadvantages
Potential Advantages
Low risk of expensive mistakes Opportunity to use household
resources Low overhead Gradual start-up and growth No commuting time or expense Tax advantages (with
deductions allowed for part of the house)
Relatively inexpensive way to test a market
Reduced child-care costs Increased quality time with
family
Isolation and lack of contact
with colleagues Increased family stress Need for self-discipline Local by-laws and regulations Less established or refined
image Conflict with neighbours Parking problems
Chapter 7 7-9Copyright © 2007 by Nelson, a division of Thomson Canada Limited.
A Location Checklist for Home-Based Business
A consideration of the following items may help you determine if you should operate your business out of the home.
Target market Neighbourhood mix Physical visibility Competitors Life-cycle stage Image
Local/municipal licence Local zoning by-laws Space/physical
requirements Approvals Insurance Utilities Work habits/behaviour Lifestyle
Chapter 7 7-10Copyright © 2007 by Nelson, a division of Thomson Canada Limited.
Sources of Information Sources of Information
Selected Secondary Sources of Location Selected Secondary Sources of Location InformationInformation
Census Market Research Handbook Statistics Canada catalogues Statistics Canada Web site Industry Canada Web site—Strategis Local and regional governments Local resource centre or library Potential suppliers Private research companies Commercial real estate agents + Your New Eyes Research (Primary Research)
Chapter 7 7-11Copyright © 2007 by Nelson, a division of Thomson Canada Limited.
Sources of Information Sources of Information
Primary Sources of Location InformationPrimary Sources of Location Information
• Finding the right location is a real opportunity to practice new-eyes research. Textbook examples of this type of research are provided for the following businesses:
Dry cleaningGift store RestaurantTravelHome renovation
Chapter 7 7-12Copyright © 2007 by Nelson, a division of Thomson Canada Limited.
The Language of Leases The Language of Leases Key TermsKey Terms
Net rentNet rent
Gross rentGross rent
Rentable areaRentable area
Common areaCommon area
Usable building areaUsable building area
Building gross areaBuilding gross area
Loss factorLoss factorLoss factorLoss factor
Chapter 7 7-13Copyright © 2007 by Nelson, a division of Thomson Canada Limited.
Before You Sign a Lease ChecklistBefore You Sign a Lease Checklist
Escape clause Escape clause
Option to renew Option to renew
Right to transfer Right to transfer
Cost-of-living Cost-of-living
Percentage lease Percentage lease
Floating rent sale Floating rent sale
Start-up buffer Start-up buffer
Improvement Improvement
Restrictive covenants Restrictive covenants
Maintenance Maintenance
Chapter 7 7-14Copyright © 2007 by Nelson, a division of Thomson Canada Limited.
Plotting Your Future Plotting Your Future ChecklistChecklist
What criteria are important to your location?
What secondary research do you need to make a decision about location?
If you plan to operate a home-based business, be sure to complete your location analysis checklist.
Define the importance of location for your target customer.
If you are a home-based business, how have you separated work from home?
Why have your chosen the site that you have selected?
If you have a home-based business, identify any zoning issues you face.
